Calculating Gains and Losses_SPD

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Calculating Gains and LossesTrigger:

Concept

You can use Oracle Payables to track currency gains and losses in your ledger currency caused by exchange rate fluctuations.

You can use the following dates to track currency gains and losses:• Invoice GL date.• Payment issue date.• Payment maturity (for future dated payments).• Payment reconciliation or clearing with Oracle Cash Management.

If you enable the Payables option to account for gains and losses at payment issue time, then Payables automatically calculates a realized gain or loss if a payment has a different exchange rate than the foreign currency invoice it pays.

In this topic, you will calculate gains and losses, using the Invoice Workbench page.

Required Field(s) Comments

Output - Result(s) Comments

Additional Information

Last changed on: 1/18/2010 10:49:00 AM


Procedure

Step Action1. Begin by navigating to the Invoice Workbench page.

Click the vertical scrollbar.

2. Click the Payables, Vision Operations (USA) link.

3. Click the Invoices link.

4. The Invoice Workbench is a group of pages that you use to enter, adjust, and review your invoices and invoice batches.

You will use the Invoice Workbench page to calculate gains and losses.

Payables can track currency gains and losses in your ledger currency caused by exchange rate fluctuations between the following dates:• Invoice GL date• Payment issue date• Payment maturity (for future dated payments)• Payment reconciliation or clearing with Oracle Cash Management



Step Action5. You can have as many realized gain or loss accounts as you need. You can

define default Gain or Loss Accounts for Payables and override them for each bank account you use.

If you enable the Payables option to account for gains and losses at paymentissue time, then Payables automatically calculates a realized gain or loss if a payment has a different exchange rate than the foreign currency invoice it pays. Payables chargesthe amount to the appropriate Gain or Loss account assigned to the bank account fromwhich you created the payment.

If you enable the Payables option to account for gains and losses at payment clearing time, Payables automatically calculates a realized gain or loss when you create accounting entries for a foreign currency payment that you reconciled in Oracle Cash Management.

6. For example, to calculate gains and losses, you will install General Ledger and Payables and define US dollars as the ledger currency for your ledger.

You then select Accrual Basis as your accounting method. You account for payments and gain/loss at payment time only.

Begin by entering details of invoice headers.

Step Action7. Click in the Trading Partner field.



Step Action8. Enter the desired information into the Trading Partner field. Enter "GE

Capital".

9. Click in the Supplier Site Name field.

10. Enter the desired information into the Supplier Site Name field. Enter "BOSTON".

11. Click in the Invoice Date field.

12. Enter the desired information into the Invoice Date field. Enter "05-NOV-2007".

13. Click in the Invoice Num field.

14. Enter the desired information into the Invoice Num field. Enter "INV FRN 30".

15. Click in the Invoice Curr field.

16. Enter the desired information into the Invoice Curr field. Enter "CAD".

17. Click in the Invoice Amount field.

18. Enter the desired information into the Invoice Amount field. Enter "1000".

19. Click the horizontal scrollbar.

20. Click in the Distribution Set field.

21. Enter the desired information into the Distribution Set field. Enter "ADV".


23. Click in the Rate Type field.

24. Enter the desired information into the Rate Type field. Enter "User".

25. Click in the Exchange Rate field.

26. Enter the desired information into the Exchange Rate field. Enter ".600000".


28. Click the 2 Lines tab.



Step Action29. You will now enter the invoice details using the Lines tabs.

To calculate gains and losses you will enter two invoices, for example for an amount of 300 pounds (GBP) with a Corporate exchange rate, and validate the invoices.

The Corporate exchange rate on the date you enter the invoices is 2:1. When you account for the invoices, Payables creates accounting entries in both the foreign currency (300 GBP) and your ledger currency ($150 US) for both invoices, and Journal Import creates one journal entry in your ledger currency and one in GBP.

30. Click in the Amount field.

31. Enter the desired information into the Amount field. Enter "1000".

32. Click the Actions... 1 button.

or Press [Alt+c].

33. Validate the invoices using the Invoice Actions page.

Step Action34. Click the Validate option.

35. Click the OK button.



Step Actionor Press [Alt+K].

Step Action36. Click the Actions... 1 button.

or Press [Alt+c].

37. When you account for the payments, Payables creates accounting entries in both the foreign currency and your ledger currency for both payments. The accounting entries for the gains and losses are in your ledger currency only.

Select the Create Accounting field in the Invoice Actions page to create accountings.



Step Action38. Click the Create Accounting option.

39. Click the Final Post option.


or Press [Alt+K].



Step Action41. Click the OK button.

or Press [Alt+O].



Step Action42. Click the Actions... 1 button.

or Press [Alt+c].

Step Action43. Click the Pay in Full... option.


or Press [Alt+K].



Step Action45. Click in the Trading Partner field.

46. Click in the Supplier Site field.


48. Click in the Payment Date field.

49. Enter the desired information into the Payment Date field. Enter "11-DEC-2007".

50. Click in the Bank Account field.

51. Enter the desired information into the Bank Account field. Enter "BofA-204".


53. Click in the Payment Method field.

54. Enter the desired information into the Payment Method field. Enter "Check".

55. Click in the Payment Process Profile field.

56. Enter the desired information into the Payment Process Profile field. Enter "Check - GBP".



Step Action57. Click the horizontal scrollbar.

58. Click in the Rate Type field.

59. Enter the desired information into the Rate Type field. Enter "User".

60. Enter the desired information into the Payment Rate field. Enter "1.2".

61. Click in the Functional Amount field.


63. Click the Actions... 1 button.

or Press [Alt+A].

64. Select the Create Accounting field in the Payments Actions page to create accountings.

Step Action65. Click the Create Accounting option.

66. Click the Final Post option.


or Press [Alt+O].



Step Action68. Click the Tools menu.

or Press [Alt+T].

69. Click the View Accounting menu.

or Press [A].

70. Journal Import creates one journal entry in your ledger currency and one in GBP.

When you account for the payments, Payables creates accounting entries in both the foreign currency and your ledger currency for both payments. The accounting entries for the gains and losses are in your ledger currency only.

You can view these entries using the Sublegder Journal Entry Lines page.

71. You have completed calculating gains and losses, using the Invoice Workbench page.End of Procedure.


Calculating Gains and Losses_SPD

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